North Carolina Property Tax Breaks

Elderly, disabled, and other persons may qualify for various exemptions from North Carolina property tax.

Whether you live in the Appalachian Mountains, the Piedmont Plateau, or the Tidewater area of North Carolina, you’re painfully aware that your home is subject to local property taxes – year in and year out. Of course, you want to make sure that you’re not overpaying. Fortunately, there may be ways to lower your property tax burden. The first method we'll describe here is available to all North Carolina homeowners. The second depends on whether you meet certain qualifications. If you meet those qualifications, you can seek tax relief using both methods.

Method #1 – Appeal the Taxable Value of Your Home

You may know that the North Carolina authorities compute your property tax by multiplying your home’s taxable value by the tax rate.

Example: Dennis and Margaret own a home in North Carolina. The assessor has placed a taxable value of $200,000 on the home. If the tax rate is 1%, Dennis and Margaret will owe $2,000 in property tax. However, Dennis and Margaret appeal the $200,000 taxable value of their home. The appeals board reduces that value to $150,000. Now, they owe only $1,500 in property tax on their North Carolina home.

If you believe that the tax assessor has misjudged the value of your home – or if the taxable value is higher than that of similar homes – you might want to pursue an appeal. For more information, read Should You Challenge Your Property Tax Assessment in North Carolina? and Procedures for Challenging Your Property Tax Assessment in North Carolina.

Method #2 –Get All the Tax Breaks You’re Entitled To

North Carolina allows for reduced property taxes if you meet certain requirements. Here’s a summary of the chief programs in North Carolina.

Homestead exclusion for elderly or disabled. If you’re 65 years old or older, or you’re permanently disabled, you are eligible for a partial exemption. It’s $20,000 or 50% of your home’s appraised value. But you qualify only if your income is below a certain level. The level is adjusted yearly for inflation.

Circuit breaker deferral for elderly or disabled. Some North Carolina homeowners are eligible for a property tax deferment program. It places a ceiling on how much tax the owners must pay. The tax amount above the ceiling is deferred until a disqualifying event occurs – typically when the home changes hands. To get this tax break, you must be 65 years old or older, or be permanently and totally disabled. In addition, you must have lived in the home for at least five years, and have income below a designated level.

Homestead exclusion for disabled veterans. A $45,000 exemption is available to a disabled veteran, or his or her surviving spouse. The veteran must first be certified as being totally and permanently disabled because of military service. If you take this exemption, you can’t receive any other property tax break.

Although North Carolina laws set statewide property tax rules, your local government handles the administration and levying of the tax. You'll want to contact your county tax assessor for complete details on property tax exemptions. Be sure to ask about any forms you need to complete, and the deadline for filing those forms. To get contact information for your county tax assessor, go to the North Carolina assessors list posted by the Department of Revenue.

In addition to the property tax which is based on the assessed value of your home, your tax bill may include special assessments. Typically these assessments are made to pay for improvements – such as street paving or repaving – in your neighborhood.

Depending on the complexity of your situation, you may want to seek legal help to reduce your North Carolina property tax. To find an experienced real estate lawyer in North Carolina, check out Nolo’s Lawyer Direc

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